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M.512 An Aid to Accountancy—CBSE XII

Or
(a) Financial Statements are not free from personal bias since the subjectivity is
inherent in personal judgement involved in taking decisions regarding method of
depreciation, method of inventory valuation, provision for doubtful debts, etc.
(b)
S. No. Items Main Head

(i) Long-term Borrowings Non-current Liabilities
(ii) Trade Payables Current Liabilities
(iii) Provision for Tax Current Liabilities
(iv) Securities Premium Reserve Shareholders’ Funds
(v) Patents Non-current Assets
(vi) Accrued Incomes Current Assets
21. COMMON-SIZE STATEMENT OF PROFIT AND LOSS
for the years ended 31st March, 2017 and 2018

Particulars Note Absolute Amounts Percentage of Revenue from
No. Operations
31st March, 31st March, 31st March, 31st March,
2017 (`) 2018 (`) 2017 (%) 2018 (%)
I. Revenue from Operations 6,00,000 8,40,000 100 100
Total Revenue 6,00,000 8,40,000 100 100
II. Expenses:
Cost of Materials Consumed 3,00,000 6,72,000 50 80
Other Expenses 60,000 84,000 10 10
Total Expenses 3,60,000 7,56,000 60 90
III. Profit before Tax (I – II) 2,40,000 84,000 40 10
IV. Less: Tax Expenses @ 30% 72,000 25,200 12 3
V. Profit for the Year (III – IV) 1,68,000 58,800 28 7

22. (a) Let the Current Assets after acquisition of Inventories be X.
Current Assets
Current Ratio =
Current Liabilities
2 X
1 = ` 90,000 + ` 10,000
X = ` 1,00,000 × 2 = ` 2,00,000
Working Capital (i.e., CA – CL) after acquisition = ` 2,00,000 – ` 1,00,000 = ` 1,00,000
Current Assets before acquisition = Current Assets After acquisition

– Purchase of Stock on credit
= ` 2,00,000 – ` 10,000 = ` 1,90,000
Working Capital before acquisition = ` 1,90,000 – ` 90,000 = ` 1,00,000.